May 12, 2008
I was inspired to write this post for a couple of reasons.
Secondly as founders of a small business, bambu, we are interested in the concept of ‘social business’ that Dr Yunus’ introduces in his new book, Creating a World Without Poverty.
Central to our sense of purpose and value set at bambu, we concern ourselves with responsible stewardship of resources, giving back to the people and the communities in which we work in China and Vietnam, and preservation of the natural environment.
We strive to create an organization that acts with integrity. We describe ourselves as a values-driven company as opposed to a profit-driven company.
Dr. Yunus’ book presents some paradigm-breaking ideas that are a positive force for change, and made me reflect on our own business, and the role of business in general.
The notion of ‘social business’ is introduced in the first few pages. Yunus makes some important distinctions in defining what a social business is.
Importantly, he distinguishes a social business as one that directly makes products that poor people are willing to pay for, and one which directs all the profits back into the enterprise.
The Grameen Danone case study is the central focus in the book.
The key takeaway is thinking about business differently. Social goals are integral to the mission of the business. And shareholders are redefined company to include customers, suppliers, and employees, and even neighbors. It is a sustainable model that takes into account every individual the business touches. As more businesses reshape their thinking, I believe business more than any other entity can be an important force of positive change.
And the story delves deeper. It is also about utilizing resources with creativity. Grameen Danone brought fresh thinking to address issues of production, refrigeration, sales and distribution, and source of raw materials. For instance, the milk used to make the nutritious yogurt for children comes from the cows that were purchased by borrowers through the Grameen Bank. The Grameen Danone example uses mini-factories built on a local-for-local model that demonstrates small can be as efficient as big. The social business is built on a spirit of innovation and experimentation.
It is a great story about a courageous CEO who convinces his board and managers to create a business unlike any other at Danone.
But we don’t hear enough from Frank Riboud, CEO of Danone. For instance, it would be interesting to learn how he stewards new ideas into an organization that appear to be in conflict with the very purpose of business? Or how do you convince your board of directors that this project is worth investing in? How do you address dissent? How do you leverage this within the company to create a shift in culture? How can this effort have a positive change on the entire organization?
Part 2 of this article will be posted on May 19, 2008.